Alight, Inc. (NYSE:ALIT) Q3 2023 Earnings Call Transcript

Stephan Scholl: Yeah, I mean listen, I think we’ve all hit it here a little bit, which is – and I’m not sure why it needs to be clarified so much based on what’s out there, but the high value segments of our business, which is the recurring business process as a service, so the BPaaS components, which show up in employer solutions is strong, and we feel really good about the high quality book of business. And that’s what feeds us into not only finishing ‘23, but more importantly for everybody as investors. They all want to understand obviously what’s the midterm continued to look like. Our mid-term guidance is strong because of that 26% BPaaS bookings, 22% BPaaS or revenue growth. The air pocket, if you want to call it anywhere, is $15 million of kind of lower value one-time business that is in segments that do not really have a lot of impact in the ‘24 through ‘26 midterm guidance.

So even though some of that revenue shows up in employer solutions, it still is that one-time category within employer solutions versus the higher category recurring revenue. So that’s what gives us the confidence in ‘24 and beyond.

Emily Marzo: Okay, thank you. And then following-up, how should we think about pricing given the new modules coming out semi-annually? How should we think about pricing going into 2024?

Jeremy Heaton: So from a pricing standpoint, so we are out to market with a model that we’ve talked about, Heather, which has been well-received and allows us to monetize as you think about the two rollouts of new technology from a product standpoint each year. So it gives us an ability to monetize that in. Of course, it will take time over the life of the renewal cycle that we have in the business for that to take hold, but it is a part of what we see as we look in the midterm outlook, both on a revenue and then how we think about that specific SKU level standardization, which is driving what you’re seeing already today in some of the margin profile, and then the expectations, although we haven’t given guidance for next year, of what we expect to see. So it’s going very well and we’ll continue to drive, but again, over a period of time for us.

Emily Marzo: Thank you.

Jeremy Heaton: Sure.

Operator: Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. I will now hand over to Stephan Scholl for closing remarks.

Stephan Scholl : Thanks, everybody. I really appreciate you all joining us today, and we look forward to building on our momentum and finishing the year strong. So look forward to seeing you all in the future. Thank you.

Operator: Thank you, sir. Ladies and gentlemen, that concludes today’s event. Thank you for attending, and you may now disconnect your lines.